61 W. Va. 183 | W. Va. | 1907
In the matter of H. C. Henderson, bankrupt, on the 25th day of May, 1905, under a decree of the United States District Court for the Northern District of West Virginia, a sale was made by the Union Trust and Deposit Company, trustee, ' of- the - real estate of the bankrupt, situated in Wood county, and which consisted of different tracts, one of which contained sixty-two acres. This tract was laid off into three sections, numbered respectively one, two and three.
The plaintiff alleges that on the day of sale he entered into an agreement with the appellant, James M. Henrie, by which they were both to bid on the sixty-two acre tract, and in the event either became the purchaser thereof, Henderson was to have a certain portion of the tract, being about ten acres, laid off out of sub-division number one, and Henrie was to hav.e the residue. At the sale the property was ■offered as a whole, and also by the several parcels into which it had been laid off, and the price bid for the whole being greater than the aggregate amount bid for the three several parcels, and Henrie being the highest bidder, he became the' purchaser thereof. The terms of sale were one-third cash, and the remainder in installments, but 'Henrie not desiring to pay interest, paid the entire amount in cash.
As the case is presented, we must determine from the allegations of the bill whether or not the motion to dissolve was propeíly overruled. The appellant contends that the effect of the alleged contract is to suppress and stifle competitive bidding, and for that reason it is against public policy, and void, and will not be enforced at the instance of either of the contracting parties. In determining whether or not its effect is as claimed by the defendant, we must accept the plaintiff’s version of it, as given by him in his bill. The bill shows that before the sale the plaintiff and the defendant Henrie entered into an agreement to bid on the property, Henrie desiring to purchase the whole or a portion thereof, and the plaintiff only desiring a certain stipulated portion of same; and that whoever became the purchaser, if
After the making of this agreement it is alleged that the property was offered for sale; that certain bidding was done and that it was purchased by Henrie under the said agreement for a stipulated sum, and for the benefit of the plaintiff, to the extent of that portion of the land which the bill described as the part to be paid for and owned by him. To render a contract of this character void, it must appear that the agreement is made for the purpose of stifling or suppressing bidding. There can be no objection to two or more persons entering into an agreement to purchase property offered for sale at public auction to the highest bidder jointly, if they do so in good faith and the agreement is free from fraud. Rorer on Judicial Sales, section 77; Holmes et al v. Holmes, 3 Rich, Eq. 61: Bank v. Sprague, 20 N. J. Eq. 159, 169.
“ But combinations to advance or reduce the price of property and all by-bidding, is illegal and fraudulent. ” Rorer on Judicial Sales, section 77. Veazie v. Williams, 8 How. 154; Ralphsnyder v. Shaw, 45 W. Va. 680, Nitro-Phosphate Syndicate of London v. Johnson, 100 Va. 774; Underwood v. McVeigh, 23 Grat. 409.
“As a general rule, any arrangement made for the purpose of reducing or suppressing competition at a judicial sale, or any device, trickery, agreement, or contrivance to chill the bidding thereat, is fraudulent and void, and will furnish sufficient ground for setting aside the sale, or even, it has been held in some cases, render the sale void. But there is nothing improper in an honest combination or association of several persons, entered into in order to enable them to bid at a judicial sale, and become the-purchasers of property which singly they could not purchase.” 17 Am. & Eng. Ency. Law, (2d Ed.) pp. 980-981, and cases cited.
We cannot deduce from the agreement, as set up in the plaintiff’s bill, that it was a fraudulent arrangement to suppress bidding and to purchase the property for an inadequate
All allegations of a bill, well pleaded, upon a motion to dissolve an injunction before answer, as upon a demurrer, are taken to be true. Ludington v. Tiffany, 6 W. Va. 11: McCoy v. McCoy, 29 W. Va. 817; Pealross v. McLaughlin, 6 Grat. 64. We cannot say that the contract as alleged in the bill is against public policy, and for that reason void and unenforceable.
The remaining question to be disposed of is whether or not an officer of the United States court, who by a decree of that court has been ordered to convey to the purchaser certain real estate sold under a decree in a suit instituted and prosecuted therein, can be enjoined from so doing by a State court. The circuit court unquestionably has jurisdiction to entertain the plaintiff’s bill for a specific performance of the contract, and the United States District Court did not have jurisdiction to do so; as was decided by the United States Circuit Court of Appeals,-C. C. A. page --. But the fact that that court, upon appeal, held that the District Court had no jurisdiction, and directed a dismissal of the cause, does not in any way affect or have any bearing upon the decision of this cause. It left the matter as if no attempt had been made in the bankruptcy proceeding to settle the matter in controversy between the plaintiff and Henrie. Then the question is, can the circuit court enjoin the making of the conveyance to Henrie by the trustee, or enjoin Henrie from accepting a conveyance of the real estate of which the
Story, in his work of Equity Jurisprudence, speaking upon this subject, says: “There is one exception to this doctrine which has been long recognized in America; and
“It is well established that a state court cannot enjoin a pro-needing or judgment of a federal court. The jurisdictions are independent, and there is no right in a state court to interfere.” Pomeroy’s Eq. Jur., section 641. Dorr's Admr. v. Rohr, 82 Va. 369, announces the same doctrine. Judge Lewis, in delivering the opinion of the court, says: “Moreover, a judgment or decree of a federal court cannot be enjoined by a state court. The circuit court of the United States and state courts are tribunals independent of each other, and nothing is better settled than that the one cannot lawfully interfere with the proceedings of the other. And the rule obviously applies as well after judgment or decree as at any anterior stage of the proceedings; for execution is called the life of the law, and the jurisdiction of a court is not exhausted until its judgment is satisfied.” This is the well settled, if not the universal doctrine. Some of the courts so holding are: Dodge v. Walcott, 8 U. S. (4 Cranch) 179; McKim v. Voorhis, 11 U. S. (7 Cranch) 279; Peck v. Jenness, 48 U. S. (7 How.) 612; Taylor v. Carryl, 61 U. S. (20 How.) 584; Freeman v. Howe, 65 U. S. (24 How.) 451; Watson v. Jones, 80 U. S. (13 Wall.) 679.
Therefore, the order of the circuit judge, overruling the motion to dissolve the injunction, is reversed, in so far as' the Union Trust and Deposit Company, trustee, is enjoined and inhibited from conveying to the defendant Henrie that portion of the property sold in the bankruptcy proceeding and purchased by him, and also which enjoins and inhibits the defendant, Henrie, from acquiring the legal title thereto, and the injunction to that extent is dissolved .and vacated; but in all other respects the order is affirmed.
Reversed in part. Affirmed im pa/rt.